RELATING TO RENEWABLE ENERGY.

SB2033

THE SENATE

S.B. NO.

2033

THIRTY-THIRD LEGISLATURE, 2026

STATE OF HAWAII

A BILL FOR AN ACT

Relating
to Renewable energy
.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:

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SECTION 1.
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The legislature finds that pursuant to Act
97, Session Laws of Hawaii 2015, Hawaii has committed to achieving a one
hundred per cent renewable portfolio standard by December 31, 2045.
�
This transition away from imported fossil
fuels toward locally available renewable energy sources is critical for
ensuring the State's energy independence, economic sustainability, and
environmental resilience.

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The
legislature further finds that the transition to a clean energy economy
requires customer-friendly processes to enable widespread adoption of
distributed energy resources and electrification technologies.
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Current interconnection and utility service
upgrade processes have at times led to delays, unexpected costs, and increased
customer dissatisfaction, hindering progress toward achieving the State's clean
energy goals.
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These challenges also
result in localized power quality issues and power outages when customers
increase loads without informing the utility.

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The
legislature finds that establishing streamlined and transparent interconnection
processes will encourage consumer adoption, enable proactive utility planning,
and ensure reliability and cost-effectiveness in the power system.
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The integration of smart inverters and other
customer-sited technologies is critical to minimizing grid investments and
achieving a clean, sustainable energy future.

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Accordingly,
the purpose of this Act is to establish a grid-ready home interconnection
process that supports the rapid adoption of clean energy technologies,
facilitates smart utility investments, and ensures power system reliability.

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SECTION
2.
�
Section 269-141, Hawaii Revised
Statutes, is amended by adding a new definition to be appropriately inserted
and to read as follows:

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"
"Grid-ready
home" means a residential property equipped or modified to anticipate and
streamline the integration of clean electrification technologies such as
electric vehicle chargers and heat pumps, distributed energy resources such as
photovoltaic systems, energy storage batteries leveraging current national
standards for functionality such as Underwriters Laboratories (UL) 1741 and UL
3141, and advanced grid modernization technology.
"

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SECTION

3
.
�
Section
269-142, Hawaii Revised Statutes, is amended to read as follows:

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"[
[
]�269-142[
]
]
�
Reliability
standards; interconnection requirements; adoption and development; force and
effect.
�
(a)
�
The commission may adopt, by rule or order, reliability
standards and interconnection requirements.
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Reliability standards and interconnection
requirements adopted by the commission shall apply to any electric utility and
any user, owner, or operator of the Hawaii electric system.
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The commission shall not contract for the
performance of the functions under this subsection to any other entity as
provided under section 269-147.

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(b)
�
The commission may develop reliability
standards and interconnection requirements as it determines necessary or upon
recommendation from any entity, including an entity contracted by the
commission to serve as the Hawaii electricity reliability administrator
provided for under this part, for the continuing reliable design and operation
of the Hawaii electric system.
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Any
reliability standard or interconnection requirement developed by the commission
shall be adopted by the commission in accordance with subsection (a) [
in
order
] to be effective.
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The
commission shall not contract for the performance of the functions under this
subsection to any other entity as provided under section 269-147.

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(c)
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The commission shall have jurisdiction over
matters concerning interconnection requirements and interconnections located in
the State between electric utilities, any user, owner, or operator of the
Hawaii electric system, or any other person, business, or entity connecting to
the Hawaii electric system or otherwise applying to connect generation or
equipment providing ancillary services to, or operate generation and equipment
providing ancillary services in parallel with the Hawaii electric system under processes
established in accordance with section 269-145.
�
Nothing in this subsection is intended to give
the commission general supervision authority over any user, owner, or operator
of the Hawaii electric system or any other person, business, or entity that is
not a public utility as defined in section 269-1.

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(d)
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The commission shall establish a streamlined
grid-ready home interconnection process for customer-sited and grid-tied
renewable energy generation and storage systems.
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The process shall include:

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(1)
�
A streamlined notification and
approval process for customers seeking to install distributed energy resources
systems using Underwriters Laboratories (UL) 1741, UL 3141, or equivalent
certified functionality;

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(2)
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A tiered cost-sharing schedule to
address service upgrades and interconnection costs, to be paid by the owner of
the customer generating facility as follows:

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(A)
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$50 for a customer generating
facility with a capacity of not more than twenty-five kilowatts;

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(B)
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$5 per kilowatt for a customer
generating facility with a capacity of greater than twenty-five kilowatts and
not more than one hundred kilowatts; and

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(C)
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$10 per kilowatt for a customer
generating facility with a capacity of greater than one hundred kilowatts;

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provided
that the cost-sharing schedule shall be reviewed and may be adjusted every six
months upon approval by the commission, based on the actual costs of upgrades
completed by the public utility during the preceding two years to facilitate
interconnection; provided further that for the purposes of this paragraph,
"customer generating facility" means a customer-sited and grid-tied
renewable energy generation and storage system;

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(3)
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Procedural timelines for public
utility action, including requiring the public utility to:

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(A)
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Notify the customer applying for
interconnection that their application is complete or if not, the specific
information that is missing no later than five business days after receipt of the
application;

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(B)
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Provide the customer an executable
interconnection agreement no later than five business days after confirming the
completeness of the interconnection application; and

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(C)
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Provide the customer a fully
executed interconnection agreement, process and necessary notifications, and
grant interconnection, no later than five business days after receiving the
customer's executed interconnection agreement and verifying that all required
permits have been issued by the appropriate authority;

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(4)
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Provisions to allow distributed
energy resources operation with managed power export and import where service
upgrades are required; provided that the upgrades shall be completed within
three months of ;
and

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(5)
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Protocols for virtual commissioning
and issuing of interconnection agreements within one week of the submission of
a commissioning packet.
"

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SECTION

4
.
�
Section
269-145, Hawaii Revised Statutes, is amended to read as follows:

����
"[
[
]�269-145[
]
]
�

Grid access; procedures for interconnection; dispute resolution.

�
(a)
�
Each user, owner, or operator of the Hawaii
electric system, or any other person, business, or entity seeking to make an
interconnection on the Hawaii electric system shall do so in accordance with
procedures to be established by the commission by rule or order.

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(b)

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The commission shall have the authority
to make final determinations regarding any dispute between any user, owner, or
operator of the Hawaii electric system, or any other person, business, or
entity connecting to the Hawaii electric system, concerning either an existing
interconnection on the Hawaii electric system or an interconnection to the
Hawaii electric system created under the processes established by the
commission under this section.

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(c)
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In establishing a rule or order for the
utility interconnection process for renewable energy and storage systems for
grid-ready homes, the commission shall ensure the process:

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(1)
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Allows licensed electricians to
isolate electrical service at utility meters for meter panel replacement, meter
socket adapter installation, or main panel upgrades; provided that access shall
be subject to:

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(A)
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Notification by the public utility
to the owner of the grid-ready home of the planned service disconnection on the
morning of the planned service disconnection;

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(B)
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Confirmation of passed inspections
by the appropriate authority; and

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(C)
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Confirmation of reconnection
procedures; and

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(2)
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Establishes a virtual commissioning
process whereby system installers may submit documentation confirming
compliance with filed settings and operational requirements of the installed
distributed energy resources.
"

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SECTION

5
.
�
Section
269-145.5, Hawaii Revised Statutes, is amended to read as follows:

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"
�269-145.5
�

Advanced grid modernization technology; principles.
�
(a)
�

The commission, in carrying out its responsibilities under this chapter,
shall consider the value of improving electrical generation, transmission, and
distribution systems and infrastructure within the State through the use of
advanced grid modernization technology [
in order
] to improve the overall
reliability and operational efficiency of the Hawaii electric system.

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(b)
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In advancing the public interest, the
commission shall balance technical, economic, environmental, and cultural
considerations associated with modernization of the electric grid, based on
principles that include but are not limited to:

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(1)
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Enabling a diverse portfolio of
renewable energy resources;

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(2)
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Expanding options for customers to
manage their energy use;

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(3)
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Maximizing interconnection of
distributed generation to the State's electric grids on a cost-effective basis
at non-discriminatory terms and at just and reasonable rates, while maintaining
the reliability of the State's electric grids, and allowing [
such
]
access and rates through applicable rules, orders, and tariffs as reviewed and
approved by the commission;

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(4)
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Determining fair compensation for
electric grid services and other benefits provided to customers and for
electric grid services and other benefits provided by distributed generation
customers and other non-utility service providers; and

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(5)
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Maintaining or enhancing grid
reliability and safety through modernization of the State's electric grids.

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(c)
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The commission, in carrying out its
responsibilities under this chapter, shall ensure the grid-ready home
interconnection process aligns with principles of advanced grid modernization
technology by:

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(1)
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Streamlining customer access to
renewable energy and storage resources;

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(2)
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Enhancing customer participation in
reliance-enhancing energy programs through rapid integration; and

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(3)
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Optimizing grid operations to
accommodate increased electrification while minimizing infrastructure costs.
"

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SECTION

6
.
�
Section
269-146, Hawaii Revised Statutes, is amended to read as follows:

����
"[
[
]�269-146[
]
]
�

Hawaii electricity reliability surcharge; authorization; cost recovery.
�
(a)
�
The commission may require, by rule or order,
that all utilities, persons, businesses, or entities connecting to the Hawaii
electric system, or any other user, owner, or operator of any electric element
that is a part of an interconnection on the Hawaii electric system shall pay a
surcharge that shall be collected by Hawaii
'
s
electric utilities.
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The commission shall
not contract or otherwise delegate the ability to create the Hawaii electricity
reliability surcharge under this section to any other entity.
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This surcharge amount shall be known as the
Hawaii electricity reliability surcharge.

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(b)
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Amounts collected through the Hawaii
electricity reliability surcharge shall be transferred in whole or in part to
any entity contracted by the commission to act as the Hawaii electricity
reliability administrator provided for under this part.

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(c)
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The Hawaii electricity reliability surcharge
shall be used for the purposes of ensuring the reliable operation of the Hawaii
electric system and overseeing grid access on the Hawaii electric system
through the activities of the Hawaii electricity reliability administrator
contracted under section 269-147; provided that amounts collected under the
Hawaii electricity reliability surcharge shall not be available to meet any
current or past general obligations of the State.

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(d)
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The commission may allow an electric utility
to recover appropriate and reasonable costs under the Hawaii electricity
reliability surcharge for any interconnection to the Hawaii electric system,
including interconnection studies and other analysis associated with studying
the impact or necessary infrastructure and operational requirements needed to
reliably interconnect a generator, as well as from electric utility customers
through a surcharge or assessment subject to review and approval by the
commission under section 269-16.

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(e)
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The commission may allow the Hawaii
electricity reliability administrator contracted under section 269-147, if
contracted to perform the commission's functions under section 269-142(d), to
recover appropriate and reasonable costs under the Hawaii electricity
reliability surcharge for the implementation and operation of the grid-ready
home interconnection process, including staffing, training, and infrastructure
upgrades required to meet the grid-ready home interconnection process's
timelines and standards.

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[
(e)
]

(f)

�
Nothing in this section shall
create or be construed to cause amounts collected through the Hawaii electricity
reliability surcharge to be considered state or public moneys subject to
appropriation by the legislature or be required to be deposited into the state
treasury."

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SECTION

7
.
�
Section
269-149, Hawaii Revised Statutes, is amended by amending subsection (b) to read
as follows:

����
"(b)
�
The Hawaii electricity reliability administrator
shall report to the commission each year on the date of agreement under section
269-147 following the original contracting between the Hawaii electricity
reliability administrator and the commission on [
the
]
:

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(1)
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The
status of its operations, financial
position, and a projected operational budget for the fiscal year following the
date of the report[
.
]
; and

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(2)
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The status, effectiveness, and
outcomes of the grid-ready home interconnection process, including:

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(A)
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The number of customers served under
the process;

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(B)
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Average timelines for
interconnection approvals and upgrades;

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(C)
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Total fees collected by the public
utility under the process;

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(D)
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Total costs recovered by the public
utility in service of the process; and

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(E)
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Value of infrastructure upgrades
deferred or avoided as a result of the process.
"

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SECTION
8.
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Statutory material to be repealed is
bracketed and stricken.
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New statutory
material is underscored.

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SECTION
9.
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This Act shall take effect on January
1, 2027.

INTRODUCED BY:

_____________________________

Report Title:

PUC;
Renewable Energy; Grid-Ready Homes Interconnection Process; Hawaii Electricity
Reliability Administrator; Electricity Reliability Surcharge; Report

Description:

Requires
the Public Utilities Commission to establish a streamlined grid-ready homes
interconnection process.
�
Authorizes the
use of the Hawaii electricity reliability surcharge for cost recovery of
certain expenses of the Hawaii Electricity Reliability Administrator associated
with the grid-ready homes interconnection process.
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Requires a report to the PUC on the
grid-ready homes interconnection process.
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Effective 1/1/2027.

The summary description
of legislation appearing on this page is for informational purposes only and is
not legislation or evidence of legislative intent.